NEWS AONE <br /> <br /> 29-10-2012 18:06 DJ Wanxiang Replaces Bankruptcy Lender as A123 Bidding War Heats Up <br /> <br /> By Patrick Fitzgerald <br /> <br /> A123 Systems Inc. (AONE), the electric car battery maker that recently filed for bankruptcy, is seeking emergency approval to tap a $50 million loan provided by a Chinese auto parts maker to fund its Chapter 11 case pending an auction of the clean energy firm. <br /> <br /> Lawyers for A123 Systems said Sunday in a bankruptcy court filing that Chinese auto parts maker Wanxiang Group Corp. will provide the so-called debtor-in-possession financing, replacing initial lender Johnson Controls Inc. (JCI) Wanxiang's bankruptcy loan, which cuts the interest rate to 12% from 15% from Johnson Controls' initial offer, comes as a bidding war heats up between the two companies vying for the Massachusetts-based battery maker's assets. <br /> <br /> Wanxiang is still eager to buy A123, which filed for Chapter 11 after receiving nearly $250 million in government grants, despite having been left at the altar earlier this year when a previous deal collapsed. <br /> <br /> As late as a month ago the Chinese auto parts maker thought it had a deal to buy an 80% stake in A123 Systems for $465 million. Wanxiang's initial offer--which also would have included the purchase of A123's consumer arm and grid-energy storage division--sputtered after it encountered opposition from lawmakers concerned about the transfer of U.S. taxpayer dollars and technology to China.